The AAII Philadelphia Chapter presents...

Risk Premiums, Valuations, Mean Reversion & ETF Selection

It?s astounding that the financial news media doesn?t do stories about a very sensible investment strategy, based upon two well-known phenomena. The first is that risky investments, on average, earn higher rates of return than risk-free assets (their risk premiums). The second is that if something is out of kilter, more likely than not it will eventually get back to normal (reversion to the mean). Michael Paciotti looks for categories of investments (asset classes) whose risk premiums are larger than is justified by how risky they are. He then buys exchange-traded funds (ETFs) that cover them. When reversion to the mean drives those risk premiums back down to normal, he sells at a profit. If you would like to learn how he does it, then come to our meeting!

Attend This Meeting and Learn...

How valuations affect asset class returns

What mean reversion is, and why it is important in investment decision-making

Computerized Investing Chris Morris, justachris@gmail.com This group is dedicated to the art and science of technical analysis. We look at stock charts and indicators through the eyes of some of our members. The members comprise all levels of understanding, from the inexperienced to the seasoned investor. The experienced members are always willing to assist the less knowledgeable. We meet every third Saturday of each month from 10 a.m. to 2 p.m. Please email justachris@gmail.com for information and directions.

Mutual Funds John Kiernan, 215/348-8310 Meets at Penn Wynne Library, 130 Overbrook Pkwy., Wynnewood, PA, 610/642-7844, 7:00 to 9:00 p.m. on the second Tuesday of the month. This is a working group that examines mutual fund newsletters, software, member portfolios (in percentage terms), decision processes and related topics.

Options and Strategies Geraldine DePaula, 215/233-3838 Meets at Easttown Library, just south of US 30 at 720 First Avenue in Berwyn, PA, 610/644-0138, from 7:00 to 9:00 p.m., usually on the first Tuesday of the month. (For a map, visit www.easttownlibrary.org, then click the link: Directions:.) This SIG helps familiarize members with how options may be used in different aspects of portfolio management, including income supplementation and asset protection. It introduces the differing strategies in plain language and offers the opportunity to ask questions and share ideas with fellow AAII members. We have members at all levels of experience with options and any one evening may have discussions on many levels.

Value Investing Bob Bolder, 267/467-4178 Usually meets 7:00 to 9:00 p.m. on the third Tuesday of the month. This group discusses the investment merits of (usually) two stocks, using the criteria established by such well-known investors as Warren Buffett, Mario Gabelli, Benjamin Graham and Peter Lynch. Please phone Bob Bolder to learn the meeting location.

The American Association of Individual Investors is an independent, nonprofit corporation formed for the purpose of assisting individuals in becoming effective managers of their own assets through programs of education, information and research.